Right. If you "pay" for the miles (by flying and earning them), they're not taxed. If they're won, they're taxed. If you get them in exchange for some form of donation (National Parks, for example), they reduce the amount of the donation that you can deduct, i.e. they're taxable. For the National Parks thing, they value them at $0.022/mile. Overall,this wouldn't be a horrible way to get a bunch of miles, price-wise.

Cheers.